Final Order in the
INTEROCEAN INSURANCE SUVEYORS AND LOSS
ASSESSORS PVT. LTD.
[Based on reply to the Show Cause
Notice (SCN) dated26-05-2020 and submissions made during the hearing through
video conference held on 22nd April, 2021 at 3 p.m., chaired by
Member (Non Life).]
1. The Insurance Regulatory and
Development Authority of India (Authority) had conducted during 05/08/2019 to 09/08/2019an onsite
inspection of M/s. Interocean Insurance Surveyors and Loss Assessors Pvt. Ltd.
Authority forwarded a copy of the Inspection Report to the SLAon 16-09-2019 seeking comments and the SLA’s comments were received. Upon examining the documents on
hand and submissions made by the SLA, the
Authority issued Show Cause Notice(SCN)to the SLA on 26-05-2020 which was
responded to by the SLA vide letter dated 15-6-2020.
3. As requested therein, a hearing
through video conference was given to the SLA on 22nd April, 2021.
Shri S. Vijayakumar, Director, and Shri Suresh Chandra Nigam, HOD (Survey Dept),
attended the hearing on behalf of the SLA. On behalf of the Authority, ShriPrabhat
Kumar Maiti, GM (Enforcement), Smt. KGPL Rama Devi GM (Surveyors), Shri B.
Raghavan, DGM (Enforcement), and Smt. Nimisha Srivastava, DGM (Surveyors), attended
4. The submissions made by the
SLA in their written reply to the Show Cause Notice and those made
during the hearing through video conference and the documents submitted by the
SLA in evidence of their submissions have been considered by the Authority
and accordingly the decisions on the charges are detailed below.
Violation of regulation 16(5) of IRDAI
(Insurance Surveyors and Loss Assessors) Regulations, 2015; which envisages
that Surveyor and Loss Assessor shall not accept or perform survey works in
areas for which he does not hold a license.
Observation:Out of the total 75 samples
collected from the pre-inspection data for the F.Y. 2018-19 there were47 Marine
claims; which are claimed to have been surveyed by S. Vijaya Kumar or Capt. Jai
Kumar. However, the reports were signed by Mr. Fasih Uddin Ahmed.
Similarly, 56 samples collected for
the F.Y. 2017-18 there were51 Marine claims; which are claimed to have surveyed
by S. Vijaya Kumar. However, the reports were signed by Mr. Fasih Uddin Ahmed.
Mr. Fasih Uddin Ahmed was not licensed
for doing the “Marine Cargo” surveys, during the period when he signed the reports
and as per the submission of SLA he got the license for Marine Cargo only on
Summary of Reply to SCN:
Mr. Fasih Uddin Ahmed who signed the survey report signed them in anticipation
of getting appropriately licenced. SLA’s understanding was thatMr. Fasih
Uddin Ahmed who was head of department can sign the
report. They realized the oversight and have assured not to repeat such
oversights. The SLA reiterated the submission during the personal hearing.
Regulation 16(5) states that a surveyor
is not permitted to accept or perform survey works in areas for which he does
not hold a license. In this case, the reports have been signed by Mr. Fasih Uddin
Ahmed and hence it is concluded that he has carried out survey without holding
requisite qualifications and training. The act of Mr. Fasih Uddin Ahmed is not
in conformity with the relevant regulation. But for doing so, the SLA has come
out with the logic that they were under the impression that Mr. Fasih Uddin Ahmed
who was head of department can sign the report and hence he signed the
reports. In addition, the SLA has submitted that Mr. Fasih Uddin Ahmed had
signed the reports unintentionally.
From the copy of sample Marine Cargo
Survey reports collected during the Inspection, 20 of such survey reports,
where reports were prepared during the Financial Year 2017-18 and 2018-19, were
signed by Mr. Fasih Uddin Ahmed as a Surveyor. Considering that these reports
are signed before he got
the license for Marine Cargo on 05-07-2019; there is a violation ofregulation 16(5) of IRDAI
(Insurance Surveyors and Loss Assessors) Regulations, 2015. It is observed that
these 20 Marine Cargo Surveys were conducted and signed on 8 different dates.
Hence, by virtue of the powers vested in it under Section 102(b) of the
Insurance Act, 1938, the Authority levies as penalty on the SLA an amount of
Rs.8 Lakh (Rupees Eight lakh only).
Further the SLA is directed to confirm
that this practice has been stopped from the date of inspection, that is
05/08/2019 and that only surveyors having valid license are doing the survey
and signing the survey reports.
6. Charge No. 2:
Violation of regulation13 (2) of Chapter IV of IRDAI
(Insurance Surveyors and Loss Assessors) Regulations, 2015.
Observation: It was observed that the
corporate surveyor has conducted numerous surveys during the financial years
2016-17 to 2018-19. While going through the date of submission of reports to
Insurers (from the submitted data), it was noticed that out of these surveys,
in 89% cases survey reports are submitted after the regulatory time limit of 30
days. Further the delay observed in all sampled cases was more than 180 days.
Summary of reply to SCN:
Surveyor who carried out
the surveys resigned from the SLA and never informed the SLA about the pendency
in insurance survey reports submissions in compliance with regulation 13(2),
which resulted in delayed submission of survey reports.
During personal hearing, while
reiterating their reply to SCN, the SLA submitted that concerned Surveyor was
the Director of the company and though he was Director, he did not take
interest in the work and never completed the work on time. When he left, another
Surveyor joined the company and he took steps to complete the pending reports.
In cases where there was delay, the verbal consent of the insurer was taken,
and all reports were completed & submitted with regular follow up and
consonance with the insurers. The SLA accepted that out of the cases identified,
in in majority of cases there was delay in submission of the reports beyond the
time limit allowed by the regulations. The SLA has assured to be careful to
monitor surveys and timelines as stated in the Regulation 13(2).
The percentage of cases where reports have
been submitted by the SLA beyond the timeline specified in the regulations, is
very high. Added to this is the fact that the SLA neither sought extension of
time from the insurer for submitting the report late, nor informed the insured
about the delay that would be taking place. In that connection, SLA’s
attention is drawn to Regulation 13(2) envisages that (wherever delay would
occasion) the SLA shall under intimation to the insured; seek an extension,
from the insurer for submission of his report. However, the SLA failed to
observe the same.
For their failure as above, the SLA has come
out with justification by putting the blame wholly on a former Director
Surveyor. In this connection, it is noticed that delay in the submission of
reports has taken place even in the period subsequent to the exit of the
The scenario as above indicates not only the absence
of control of the management over the surveyors, but also the complete
insensitivity in fulfilling the responsibilities for ensuring timely submission
of reports. The manner of functioning of the SLA has the grave potential to jeopardize
the interest of policyholder.
In view of the above, the SLA is directed to
put in place robust mechanism to ensure that the lapses/failures of the nature
noticed in their functioning are not repeated and demonstratethe same to the
Authority. The SLA is cautioned that if the lapses recur the same, shall be
dealt seriously. The SLA is further directed to ensure compliance of Regulation13 (2) of Chapter
IV of IRDAI (Insurance Surveyors and Loss Assessors) Regulations, 2015, in
letter and spirit, within 21 days of receipt of this order.
7. Charge No.3:
Violation of Regulation4 of IRDAI (Insurance Surveyors and Loss
Regulations, 2015 and IRDAI Cir. No. IRDA/SUR/CIR/ MISC/ 118/ 08/2018.
per regulation 4 of IRDAI (ISLA) Regulations, 2015 and IRDAI Cir. No.
IRDA/SUR/CIR/ MISC/ 118/ 08/2018, the SLA required communicating to IRDAI
within 15 days about the branches of its operations. The SLA shared the list of
employees of Interocean Insurance Surveyors and Loss Assessors. While going
through it, it was noticed that total number of its 9 employees were posted at
four branches located at Delhi, Kandla-Gujarat, Haldia-West Bengal and Chennai
SLA was asked to share proof of intimation to the Authority, about the opening
of these branches. In response, the SLA replied and shared copy of intimation
of one branch located at Vishakhapatnam, Andhra Pradesh in addition to the
registered corporate office with the Authority.
It is also worthwhile to
letterhead used for submission of survey reports to the insurers by the SLA,
also confirms the details of all the above stated branches namely Delhi,
Kandla-Gujarat, Haldia-West Bengal and Chennai office.
Summary of Reply to SCN:
The different depts. of
the group are working at different locations of Pan India level. The SLA
conducts inspections on appointment basis by vessel owners and charterers as
per their requirement to support agency deptt. and technical advises only and
their employees posted at different locations other than Visakhapatnam do not
carry out any survey work. SLA branches doing Survey work are only at Vizag and
It is noticed from the
letterhead of the SLA that they have branches at the other places apart from
Vishakhapatnam. But in response to the SCN and during the hearing the SLA
explained that Interocean Agency Vertical has branches all over India and the
SLA has got branches only in Vishakapatnam and Delhi. In regard to the mention
of the names of different locations, in their letterhead, the SLA has stated
that the branches referred to in their letterhead are those of the Interocean
Agency Vertical and not of SLA. In view of this submission/explanation of the
SLA, the SLA is advised to ensure compliance to Regulation 4 of IRDAI (Insurance Surveyors
and Loss Assessors)
Regulations, 2015 read with IRDAI Cir. No. IRDA/SUR/CIR/ MISC/ 118/ 08/2018 by
intimating to the Authority regarding any change in the information already
furnished to the Authority (including opening of new office by the SLA).
violated and charge
16(5) of IRDAI (Insurance Surveyors and Loss Assessors) Regulations, 2015.
of survey works in areas for which the Surveyor does not hold a license.
of 8 Lakhand direction
Regulation13 (2) of Chapter IV of IRDAI
(Insurance Surveyors and Loss Assessors) Regulations, 2015.
Delay in submission of survey
Regulation4 of IRDAI (Insurance Surveyors and Loss
Regulations, 2015 and IRDAI Cir. No. IRDA/SUR/CIR/ MISC/ 118/ 08/2018
Failure to intimate the opening of
9. As directed under the
respective charges, the penalty of Rs. Eight Lakh shall be remitted by the SLA
within a period of 45 days from the date of receipt of this Order through NEFT/
RTGS (details for which will be communicated separately). An intimation of remittance
may be sent to Mr.Prabhat Kumar Maiti, General Manager (Enforcement) at the
Insurance Regulatory and Development Authority of India, Sy. No. 115/1; Financial District; Nanakramguda;
Gachibowli; Hyderabad – 500032.
10. The SLA
shall confirm compliance in respect of the above decisions, within 21 days from
the date of receipt of this order. The order shall be placed in the upcoming
Board meeting and the SLA shall submit a copy of the minutes of the discussion.
11. If the SLA
feels aggrieved by any of the decisions in this order, an appeal may be
preferred to the Securities Appellate Tribunal as per Section 110 of the
Insurance Act, 1938.
Date: 9th June, 2021